The present invention relates generally to payment systems. More particularly, embodiments of the invention relate to payment systems using smart cards.
Portable transaction cards with processing power, or so-called "smart cards" are being developed in the size of conventional plastic credit cards. These smart cards can include an embedded computer chip having processing power and memory. Variants of these cards were described in the early 1970s by, for example, Moreno in U.S. Pat. No. 4,007,355. However, the cards are only recently becoming widely available for payment applications around the world.
The International Standards Organization (ISO) has established a number of specifications for such electronic cards under, for example, the ISO/IEC Standards Series 7810, 7811, 7816, 10536 and 14443. A typical smart card includes a plurality of spaced apart electrical contacts on one surface which provide input and output interfaces with the computer processor and memory in the card. Cards compliant with ISO/IEC Standard 7816-series have contacts which interface with a terminal via ohmic contact ("contact"-type cards). Cards compliant with, e.g., ISO/IEC Standard 10536-series or 14443-series rely on close, or remote-coupling with a terminal (hereinafter generally referred to as "contactless" -type cards). Some smart cards are now being produced with both types of contact schemes, i.e., they are compatible with terminals having contact interfaces or contactless interfaces. These types of cards are sometimes referred to as combination cards.
A block diagram of a smart card 12 is shown in FIG. 1. Smart card 12 can be implemented as a processor card as illustrated in FIG. 1. Of course, smart card 12 can be implemented in a variety of different ways, and the card of FIG. 1 is intended to illustrate one existing version of card that may be used with the present invention. Smart card 12 has an embedded microcontroller with a microprocessor 14, card memory including random access memory (RAM) 16, read-only memory (ROM) 18, non-volatile memory 20, an encryption module 24, a card reader interface 22, and first and second contact structures 26, 28. Other features of the microcontroller may be present but are not shown, such as a clock, a random number generator, interrupt control, control logic, a charge pump, power connections, and the like.
Microprocessor 14 is any suitable central processing unit for executing commands and controlling the device. RAM 16 serves as storage for calculated results and as a stack memory. ROM 18 stores the operating system, fixed data, standard routines, and look-up tables. Non-volatile memory 20 (such as EPROM or EEPROM) serves to store information that must not be lost when the card is connected to a power source but that must also be alterable to accommodate data specific to individual cards or any changes possible over the card lifetime. This information might include a card identification number, a personal identification number, authorization levels, cash balances, credit limits, etc. Encryption module 24 is an optional hardware module used for performing a variety of encryption algorithms. Card reader interface 22 includes the software and hardware necessary for communication with the outside world. In the smart card shown, two different contact structures are provided on the card, a first contact structure 26 which may be e.g., a ISO/IEC Std. 7816-series style contact, and a second contact structure 28 which may be, e.g., an ISO/IEC Std. 10536-series or 14443-series style contactless or close-coupled interface. Other types of contact schemes may also be possible, including remote-coupled, etc.
One application for smart cards such as smart card 12 of FIG. 1, is as an electronic purse or "stored value card". In this type of application, a prepaid amount of value or representation of currency is stored in the smart card memory for use in the place of conventional cash. The source of the value stored in a card may be, for example, a bank account, a credit card, a debit card, another electronic card, currency, or other sources of funds. In operation, the stored value card is inserted into a terminal device which communicates with the card through the contacts (e.g., via ohmic or close-coupling, depending upon the type of interface supported).
The terminal device may be, e.g., incorporated into a vending machine, cash register, or other point-of-sale device. Value equal to the amount of the purchase is passed from the consumer's card to the merchant terminal or to a central clearing and authorization system so the merchant or vendor may be credited with the appropriate amount of value. Correspondingly, the amount of available currency in the consumer's card is reduced by the amount of the purchase. These stored value applications are becoming more widely used in the U.S. and throughout the world. Currently, the primary applications in which stored value cards are used include purchases at vending machines, telephones, gasoline pumps, and other point of sale devices in which the goods or services purchased are low dollar value items. Other types of stored value systems use a token-type approach to value. For example, when a consumer's card is loaded with value, the consumer can pass that value to another consumer's card or to a merchant's card. The recipient of the value, or the token, can then use the value without needing to redeem the value by going through a bank clearing and settlement process. For the purposes of this disclosure, a stored value system will be described which uses a clearing and settlement function. However, those skilled in the art will recognize that techniques and features of the invention may be implemented in other types of stored value systems as well.
Stored value card systems are operated as both "open" or "closed" systems. "Closed" systems are limited to specific participating merchants. For example, some universities offer stored value cards to their students for use in university cafeterias and book stores. The cards are not compatible with point of sale devices or terminals outside the university. These "closed" systems are easier to implement from a technical and security perspective because of this closed universe of uses. "Open" systems, on the other hand, allow use of the card at substantially any merchant who has a compatible point of sale device or card reader. An example of such a system is the Visa Cash.RTM. system offered by Visa International Service Association of San Francisco Calif. In many respects, "open" stored value card systems are preferable to "closed" systems, as they allow the cards to be used in a wide variety of places, for various types of purchases. "Open" systems, however, are more difficult to implement and have more rigorous security requirements.
As these stored value card systems become more widely available, it is desirable that they be capable of use in more payment applications. For example, a solution for using stored value cards in making payments over open networks such as the internet is described in commonly-assigned U.S. patent application Ser. No. 08/951,614, entitled "Internet Payment System Using Stored Value Cards", filed on Oct. 16, 1997, which is incorporated herein by reference for all purposes.
It would also be desirable to use smart cards in transit or access applications, such as toll booths, parking meters, etc. Public transit systems are widely used in most large communities. These systems are relied upon to efficiently transport large numbers of people. To transport large numbers of people, especially at peak traffic times, it is necessary that passengers be able to enter and exit the transit system quickly in an even flow. Existing transit systems use a variety of payment and authorization methods to make sure passengers can quickly board and disembark. For example, many buses, subways, and trains allow passengers to use currency, tokens or passes to pay for their ride. The objective is to verify a passenger has paid or has a valid pass as quickly as possible to ensure the greatest possible throughput, especially at peak use times. Turnstiles and other access devices are used to permit or deny access depending upon proper verification of a rider's payment.
It would be desirable to permit transit passengers to gain access to transportation using smart cards. Further, it is desirable to implement such an access system using an "open" stored value card system (i.e., a system which is not limited to a closed universe of merchants or suppliers).
Unfortunately, however, existing smart cards and "open" stored value card systems are too slow for acceptable use in most transit systems. The security and authentication processes needed to verify a transaction using existing systems typically takes over 1.0 to 2.0 seconds. This is too long of a wait for, e.g., transit riders trying to gain entry to a transit system at rush hour. It would be desirable to implement an "open" stored value system with a quicker access and authorization time, without compromising the ability to perform full authentication and verification of cards.
Accordingly, a system and method for fast smart card transactions is described.